Problem 3 In Chapter 5, we did not include the capital and labor markets in our model solution like we did in Chapter 4. The result of this is that we did not need to solve for the equilibrium rental rate of capital, r*, or the equilibrium wage rate, w* for the Solow model. Imagine now that we augment the Solow model to include the capital and labor markets, and that the production function looks the same as it did in Chapter 4, but with time subscripts. Solve the First Order Conditions of the production function to find expressions for r,* and w,* (take partial derivatives of F(K,L) as in Chapter 4). How do these expressions differ from r* and w* found in the production model in Chapter 47 How, if at all, will the equilibrium of the Solow model change if we include the capital and labor markets